INTERNAL ASSIGNMENT ~ (Case Study CASE STUDY — Sullivan Ford Auto World Summary of the Case Walter Sullivan had purchased a small Ford dealership in 1981, renaming it Sullivan’s Auto World and had built it up to become one of the best known in the Metropolitan area. In 1996, he had borrowed heavily to purchase the current site at a major sub urban highway intersection, in an area of town with many new housing developments. Carol Sullivan- Diaz, aged 28, A young health care manager unexpectedly finds herself running a family-owned car dealership that is in trouble. She is very concerned about the poor performance of the service department and wonders whether a turnaround is possible. By national standards, Sullivan Ford Auto World stood toward the lower end of medium-sized dealerships, selling around 1100 cars a year, equally divided between new and used vehicles. In the most recent year, its revenues totaled $26.6 million from new-and used-car sales and $2.9 million from service parts, down from $30.5 million and $3.6 million, respectively, in the previous year. Although the unit value of car sales was high, the margins were quite low, with margins for new cars being substantially lower than for used ones. Sullivan-Diaz had studied carefully were the results of the customer satisfaction surveys that were mailed to the dealership monthly by the research firm retained by the Ford Motor Company. Purchasers of all new Ford cars were sent a questionnaire by mail within 30 days of making the purchase and asked to use a five-point scale to rate their satisfaction with the dealership sales department, vehicle preparation, and the characteristics of the vehicle itself. The nine-month survey findings disturbed her. Although vehicle ratings were in line with national averages, the overall level of satisfaction with service at Auto World was consistently low, placing it in the bottom 25 percent of all Ford dealerships. The worst ratings for service concerned promptness of writing up orders, convenience of service hours, and appearance of the service department. Statement of the Problem This study aims to identify the possi stable From all the existing internal and external barrier that challenges the company's stability thru improving its customer service. le solutions that could keep the Sullivan Ford Auto World SWOT ANALYSIS Strengths — 1. Auto World is one of the best known in their metropolitan area. 2. Long time customers know how the business works. Weaknesses - 1. Lack of dedicated workers/ employees. 2. Lack of proper management.Opportunities - 1. Sell the business at a rational price. 2. Wait for some time to increase the sales again. 3. If business runs good, the family can hire a manager to handle it. Threats ~ 1. Possible shut down of business if sales continue declining. 2. Customers switching to another car shop because of slow service. Questions Que1, How does marketing car differ from marketing service for cars? Ans1. Marketing Cars Big ticket item Prospective customers may debate purchase months in advance Purchase may involve exchange of existing vehicle Generally an exciting and positive activity Creation of the product takes place in a distant factory (reflecting years of R&D efforts) Much of the advertising effort in undertaken by car manufacturer Distribution takes place through franchised dealers who take responsibility for personnel selling, and participate in promotional programs with manufacturers h. Initial experiences with a new car will tend to be positive and the benefits should be readily apparent. empange Services of Cars a. Need for service tends to increase in frequency and cost as car ages. b. Service price is hard to predict but much lower than new purchase often less than $40 for routine work (oil change, lubrication etc...) c. Service is a nuisance, involving trips to the garage for drop- off and pick up, as well as loss of the car for a day or more. d. Some service problems (e.g. water leak, electrical failures) are hard to detect and often not fixed right the first time. e. Service is provided by the dealer(or another garage) not by the manufacturer whose role is limited on service. f. Customer will tend to go for service to dealer for which vehicle was purchased unless service proves unsatisfactory. g. Not always easy to determine whether service problems are the fault of the manufacturer or the service provider. h. Hard to determine if service done right and whether cost was justified.Que2. Compare and contrast the sales and service departments at Auto World. Ans2, S.No Car Sales (Fornt End) Service/Parts (Back End) Extensive advertising and 1 | promotions to attract car buyers No mention of advertising, reminders special offers to generate service business Eye-catching site in convenient location same location but service building is greasy and hidden showroom Customers can walk-in Customers must make appointments ‘Attractive, morden facility 30-year -old, greasy facitity Flowerbeds outside the customer 5 | entrance customer enter by side door ‘Sales peope work in an attractive 6 _ high cellinged showroom ‘Service writers work in cramped room with peeling paint 7 | High-polished new cars on display Morden, well-maintained equipment in service bays. a. Service revenues are dropping faster (-19.6%) than car sales revenues (-12.8%) in the most recent year b. The split between “front end” and “back end” departmental gross is more weighted towards car sales than in most dealerships (63.8 v/s 60%) ¢. Ahigh proportion of customers will use another supplier for service in the future (loss of service revenues) d. Those customers who are likely to buy another Ford in the future are a lot less likely to buy it from AW (sales losses on new cars). Que3. From a customer's perspective, what useful parallels do you see between operating a car sales and service dealership and operating health services? Ans3. S.No New Car Sales New Babies Happy department in car 1 | dealership Happy department in a hospital satisfaction Usually a planned activity with some anxiety but high potential for event, although not without anxiety 3 | Often a family affair Often a family affair Treating Car Problems ‘Treating Sick People Usually a planned and eagrly anticipated